The Nasdaq-100 Index is performing less poorly than the Dow Jones Industrial Average and S&P 500, indicating some internet equities are proving sturdy. That’s good news for ETFs, including the Global Internet Giants ETF (OGIG).
Topping the Nasdaq-100 over the past 12 months, OGIG is proving to be a credible coronavirus play. OGIG, which turns two years old in June, is leveraged to the “staying in” theme in both the U.S. and China as Amazon.com (NASDAQ: AMZN), Alibaba (NYSE: BABA) and Tencent Holdings (OTC: TCEHY) are among the fund’s top 10 holdings.
“Change is coming, due to the global health crisis, and investors should take notice,” said Kevin O’Leary, Chairman, O’Shares ETFs, in a recent note. “Many more people are choosing or are forced to stay-play-work-shop at home, accelerating important investment trends, so I’m making investment changes mostly using ETFs.”
OGIG is a rules-based ETF designed to provide investors with the means to invest in some of the largest global companies that derive most of their revenue from the Internet and e-commerce sectors that exhibit quality and growth potential.
OGIG Looks Good for the Long-Term
Not surprisingly, e-commerce is a major driver of long-term potential for OGIG and rival Internet ETFs. OGIG’s structure provides ample leverage to compelling domestic and international e-commerce trends. The fund’s e-commerce exposure is a major plus at a time when COVD-19 is dramatically altering the retail landscape, perhaps on a permanent basis. O’Leary echoes that sentiment.
“Most of my groceries and other shopping is online. It’s going to be a long time before I go back to crowded airports, shops, restaurants and theatres, and many more people are probably changing their ways,” said the O’Shares chairman.
Data confirm OGIG is at the right place at the right time.
Online sales of consumer staples items, including cleaners, toilet paper, and hand sanitizer, spiked in January and February. In March, computer and office equipment sales online increased as more Americans were forced to work from home because of the virus.
Those numbers could move more quickly to the upside because the COVID-19 pandemic is forcing a slew of malls and retail store closures across the world. In the U.S., many non-essential retailers are temporarily closed and while traditional grocery stores remain open, many shoppers are opting to order from home and not risk contracting the coronavirus by venturing outside.
“Online retail in the US has actually grown gradually to only 11.4% share of total retail in Q4 2019 so there is ample room for accelerated growth. OGIG is an ETF that allows investors to invest in a diverse portfolio of stocks likely to benefit from the stay-work-play-shop at home trends” said Connor O’Brien, CEO of O’Shares ETFs.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.